Lured by the heady promise of convergence and cost savings, businesses are starting to embrace voice over Internet Protocol (VoIP), or at least plan for its inevitability in the near future. This may be exciting news for VARs, but perhaps a little scary as well.
“”For resellers and solutions
providers, VoIP is a new source of revenue. Do you want that revenue or not?”” asked Roberta Fox, president and senior partner of analyst firm Fox Group Inc. of Markham, Ont.
“”Because if you don’t want it, somebody else is going to take it.””
This is the year VoIP will take significant beachheads in Canada, according to the SeaBoard Group. VoIP offerings and telephone company-hosted VoIP services will take off in the small and medium business market.
VoIP is a specialized market that requires knowledge in both the telecom and the datacom spaces. These two camps were kept fairly separate in the past, but are suddenly coming together — and there may not be room for everyone.
“”The folks that are providers of datacom services, they need to embrace this space sooner rather than later, because if they don’t do it, the telecom dealers will develop the data skills and they will take the market from them,”” Fox said.
“”So either the telecom folks are going to learn about data and do VoIP, or the datacom folks are going to have to learn about voice.””
This sometimes doesn’t come without a lot of “”pushing and screaming”” from both sides, she added.
Darrin Lamont, VP of sales and customer operations for Toronto-based Vonage Canada, echoes this point, and calls what’s happening in this space more of a “”collision”” than a convergence.
“”This creates opportunity in the marketplace, particularly for the systems integrators,”” he said.
Vonage is one company that offers a new IP phone service, which uses a customer’s broadband Internet connection and a hardware device called a phone adapter. This device converts analogue phone signals to digital so they can be sent over a broadband connection.
“”And in the future, what you are going to see is that the VoIP gateway is going to include a lot of phone system PBX feature functionality. And over time, it can potentially eliminate the need for your actual phone system,”” Lamont predicted.
“”The winners in all this are going to be the systems integrators in the short term, but (also) those resellers that know the Internet world, because there will be one homogenous network coming into the future, and that will be the Internet.””
With its open source structure, the Internet blurs the lines between data and voice. The old telecom world was a closed network of relatively few players. Until recently, unless you were a large telecom provider or had strong partnerships with one, the voice market was largely off limits to most VARs.
Now it’s becoming anyone’s game.
Solution for SPs
“”Service providers have not — until now — been able to compete with the large telecommunications companies,”” said Jeff Freedman, VP of operations at Gentek Marketing Inc., a Concord, Ont. hardware provider.
Gentek’s strategy is to offer service providers a turnkey hardware solution.
Freedman said that because his company has been doing telecom for 20-some years, VoIP was a natural next step.
“”When you talk about VoIP from a VAR perspective, it certainly has the potential to be a tremendously logical progression for them, because it is a network-based technology — (especially) if they are already handling a company’s internal networks,”” he said.
“”That’s really where VARs have to take a serious look at their business models. Because with VoIP, the ability to connect remote offices is certainly one of the most dramatic benefits of the technology itself.””
Freedman said that although VoIP is still a relatively new concept for many, it has hit the mainstream and companies are already investing heavily in the technology.
He echoed Fox’s point about getting into the market while it’s hot.
“”There are companies that are doing it today. And if you are not doing it, then you are not going to have those customers,”” he said.
“”If VoIP delivers everything it has the potential to deliver, then the customers who want those services are going to find a provider. The market is wide open.””
Radical shift
In fact, according to Stephen Smith, president of Ampersand, Inc.,
a Carlisle, Mass.-based systems integration company specializing in VoIP and open-source technology, VoIP represents such a shift
that many companies who have implemented systems “”have pretty much eliminated everyone in their telecom departments.””
This speaks to the fact that VoIP leverages the data-related skills that managers have traditionally used much more than any specific telecom know-how.
“”And it really replaces a whole chunk of knowledge that is becoming obsolete, such as different signalling variants and all sorts of other things that go on in the traditional telco world,”” Smith said.
There is a fundamental difference VARs should realize, Smith said: With VoIP, the intelligence has shifted from the network to the device.
In a traditional voice world of the public switch telephone network (PSTN), the end-user device is “”dumb”” and all of the intelligence is centralized in the network.
“”If you think about that telephone, there’s not a lot of intelligence. There are 10 buttons that you can push and it sends an analogue signal out — all the smarts, like how your call gets routed, are all built into the servers that sit inside the telephone network.””
VoIP, however has a very “”dumb”” packet-based network — “”all it knows how to do is to forward a packet from one router to another.”” The intelligence is in your computer or adapter. “”Ultimately, what that does is put a lot more of the power and control into the hands of the users,”” Smith said.
“”It opens up a lot of opportunities for integrators, value added resellers and service providers who want to sell hardware and maintenance solutions because they have a lot more control now,”” he said.
Eliminate integrators
However, this brings up another issue. If there is now so much control on the user side, might that even eliminate the need for systems integrators? The answer is yes — in some cases, according to Brian Sharwood, a principal with the SeaBoard Group in Toronto.
He described the telephony business as traditionally run by “”two Bobs and a truck.”” To change settings users would have to call someone in who knew telecom networks to do moves, adds and changes, often to the tune of hundreds of dollars.
But newer systems run with Web browsers, which empowers employees and employers to make changes themselves.
“”It’s an opportunity for small business owners to do things for themselves. Resellers have to rethink now what exactly they are doing for the small business,”” Sharwood said.
“”A lot of the resellers of the (old) phone systems didn’t really understand data networks. And they now need to learn data networks, because many of the new phones plug into an Ethernet plug as opposed to plugging into a regular phone jack.
“”They now have to under-
stand routing and a whole bunch of things that they didn’t (know) before,”” he said.
“”(As a VAR, you) are really going to get forced into a fairly fast learning curve. You have people who already understand data running against you.””
That’s why some believe that most VARs shouldn’t even try to break into this space at all, as it can be complex and require a level of understanding and service level offerings that cannot be achieved overnight.
Painful start
Patrick Power, managing partner for sales and marketing at OAM Computer Group, a Toronto-based VAR an
